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Online Credit Card Processing FAQ

What takes place during an ordinary Internet credit card transaction? Here is the common credit card processing FAQ:

Internet credit card transactions will always take place in two major phases, a charge and a settlement.

First Phase

In the first phase, the charge is always made and money set for the transaction is usually set aside from the holder’s account. The first transaction normally takes place immediately after the card is submitted which enables the merchant to secure the funds for the transaction much faster.

Second Phase

In this phase, the amount is usually transferred from the cardholder to the merchant. This phase normally takes place later and it is often done in batches at the end of each business day.

Settlements are usually done in batches since most processors limit the number of settlements that can be done during a specific period of time. It is also done in batches since it is more economical and easier to prevent transactions before the transfer of funds is done than crediting the cardholder account.

Electronic payment concept
Electronic payment concept

What means can a customer use to prove credit card information?

Credit cards transactions can be divided into two major types: card-present transactions and e-commerce transactions. All these fees which are associated with the credit card transactions are always dependent on the transaction type. It is, therefore, necessary to note the importance of the two.

E-commerce transaction

Also referred to as mail order telephone order (MOTO) transaction refers to a transaction where the credit card is not available. These types of transactions are normally done online or through the phone where the card details; the credit card number, billing information, expiration date are usually taken from the customer. However, this transaction method is always prone to theft and fraud, and the fees associated with this transfer type are much higher than when your credit card is present.

Card Present Transaction

Credit present transaction refers to where the credit card being charged is physically present. This card is usually swiped through a terminal. This transaction type is referred to as POS transactions.

What is a Payment Gateway?

A gateway refers to a value-added service that will always accept and process the credit cards from you in exchange for a fee. Payment gateways are known to provide extra services such as automatic settlement, reporting, transaction logging, fraud prevention, and additional security.

What is a Payment Processor?

A payment processor refers to a service company that conducts settlements and charges for credit card transactions. All the credit card transactions usually go through the payment processor.

What is a Merchant Account?

A merchant account refers to a bank account that has specifically been set up for a merchant. The main difference between the regular bank account and the merchant account is that merchant accounts usually provide support for one or more processors to be able to deposit funds that have been made by the credit card transactions.

What Steps do I need to follow to go through the payment processor?

All you need to do is make sure you have a merchant account that is compatible with the payment processor. Your merchant account bank will always inform you of the type of processors that are supported. Most merchant accounts support TSYS processors.

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